August 24, 2023
Top 10 Stock Sysco Sell Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Sysco – Top 10 Stock in S&P Food & Beverage Index
Sysco is listed as a top 10 stock on August 24, 2023 in the market index S&P US Food & Beverage because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 20 (20% performer), Obermatt issues an overall sell recommendation for Sysco on August 24, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Food Distributors |
| Index | Dividends USA, Employee Focus US, Diversity USA, S&P US Consumer, S&P US Food & Beverage, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Sysco Sell
| 360 METRICS | August 24, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 61 |
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| GROWTH | ||||||||
| GROWTH | 26 |
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| SAFETY | ||||||||
| SAFETY | 45 |
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| SENTIMENT | ||||||||
| SENTIMENT | 28 |
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| 360° VIEW | ||||||||
| 360° VIEW | 20 |
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ANALYSIS: With an Obermatt 360° View of 20 (better than 20% compared with alternatives), overall professional sentiment and financial characteristics for the stock Sysco are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Sysco. Only the consolidated Value Rank has an attractive rank of 61, which means that the share price of Sysco is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 61% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 26, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 45, meaning the company has a riskier financing structure than 55% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 72% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 28. ...read more
RECOMMENDATION: With a consolidated 360° View of 20, Sysco is worse than 80% of all alternative stock investment opportunities based on the Obermatt Method. This means that Sysco shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 61. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 26), a riskier financing structure than the competition (Safety Rank of 45), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 28) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Sysco is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Sysco. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Sysco only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 28 (better than 28% compared with alternatives), overall professional sentiment and engagement for the stock Sysco is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for Sysco. Analyst Opinions are at a rank of 53 (better than 53% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. Market Pulse is also positive with a rank of 56, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 56% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 14, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in Sysco. There are also only so many institutional investors holding company stock with a Professional Investors rank of 43, which means that, currently, professional investors hold less stock in this company than in 57% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 28 (less encouraging than 72% compared with investment alternatives), Sysco has a reputation among professional investors that is below that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more
Value Strategy: Sysco Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 61 (better than 61% compared with alternatives), Sysco shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Sysco. Price-to-Sales (P/S) is 70, which means that the stock price compared with what market professionals expect for future sales is lower than for 70% of comparable companies, indicating a good value concerning Sysco's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 86, which means that dividends are expected to be higher than for 86% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 96% of alternatives (only 4% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 51% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 61, is a buy recommendation based on Sysco's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: Sysco Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 26 (better than 26% compared with alternatives), Sysco shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Sysco. Only Capital Growth has a good rank of 79, which means that currently professionals expect the company to grow its invested capital more than 41% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 45 which means that currently professionals expect the company to grow less than 55% of its competitors. Profit Growth with a rank of 41 and Stock Returns with a rank of 25 are also low (below 75% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 26, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Sysco is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Sysco Debt Financing Safety below-average
| SAFETY METRICS | August 24, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 19 |
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| REFINANCING | ||||||||
| REFINANCING | 65 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 59 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 45 |
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ANALYSIS: With an Obermatt Safety Rank of 45 (better than 45% compared with alternatives), the company Sysco has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Sysco is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Sysco. Refinancing is at 65, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 65% of its competitors. Liquidity is also good at 59, meaning the company generates more profit to service its debt than 59% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 19, which means the company has an above-average debt-to-equity ratio. It has more debt than 81% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 45 (worse than 55% compared with alternatives), Sysco has a financing structure that is riskier than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Sysco could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Sysco Below-Average Financial Performance
| COMBINED PERFORMANCE | August 24, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 61 |
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| GROWTH | ||||||||
| GROWTH | 26 |
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| SAFETY | ||||||||
| SAFETY | 59 |
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| COMBINED | ||||||||
| COMBINED | 27 |
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ANALYSIS: With an Obermatt Combined Rank of 27 (worse than 73% compared with investment alternatives), Sysco (Food Distributors, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Sysco are a good value (attractively priced) with a consolidated Value Rank of 61 (better than 61% of alternatives) but show below-average growth (Growth Rank of 26), and are riskily financed (Safety Rank of 45), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 27, is a hold recommendation based on Sysco's financial characteristics. As the company Sysco's key financial metrics exhibit good value (Obermatt Value Rank of 61) but low growth (Obermatt Growth Rank of 26) and risky financing practices (Obermatt Safety Rank of 45), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 61% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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